What Investors Need to Known as TerraForm Global Powers Up for its IPO - Stocks in the News Zacks Thursday, July 30, 2015
TerraForm Global Inc. is expected to price its IPO Thursday night, with shares becoming publicly traded on Friday morning. The company will be listed on the NASDAQ under the ticker GLBL. Underwriters for the deal include JPMorgan (JPM), Barclays (BCS), Citigroup (C), Morgan Stanley (MS), Goldman Sachs (GS), Bank of America’s Merrill Lynch (BAC), and Deutsche Bank (DB).
TerraForm Global plans to raise $1.13 billion by offering 56.6 million shares with a price target of $19-$21 per share. The profits from the deal are going towards the purchasing of newly issued class A units of Global LLC. Based off of the mid-point of its expected pricing, TerraForm Global would have a market capitalization of $3.6 billion.
Based in Bethesda, Maryland, TerraForm Global operates in the electric services industry, distributing renewable energy through wind, solar and hydro-electric power plants. According to its S-1 filing with the SEC:
“TerraForm Global is a diversified, dividend growth orientated company formed to own and operated contracted clean power generation assets in attractive, high-growth emerging markets. Our business objective is to acquire, from SunEdison and unaffiliated third parties, clean energy generation assets that produce high-quality, long-term contracted cash flows, primarily by serving utility and commercial customers with strong credit profiles.”
TerraForm Global will focus on targeting on the markets of China, Brazil, India, South Africa, Uruguay and Thailand, as these markets are expected to be among the fastest growing solar and wind energy markets worldwide from 2015 to 202 in terms of annual installations and capital investment in renewable energy products.
Origins of the IPO
TerraForm Global’s IPO actually stems from the company spinning off from SunEdison Inc. (SUNE), who develops and manufactures silicon wafers, which it then sells
to the semiconductor industry. SunEdison actually also recently spun-off another company, TerraForm Power (TERP), a publicly traded yieldco created last year that currently holds nearly 800 megawatts of solar generation, to which it recently added 521 megawatts of contracted wind and solar generation thanks to an acquisition of First Wind Holdings.
TerraForm Global had revenue of $21.25 million and a net loss of $7.12 million for 2014. For the first three months of 2015 the company had pro forma revenue of $112.7 million. The company does plan to pay dividends, with the initial quarterly dividend expected to be $0.275 per share, or $1.10 per share annually. TerraForm Global has plans to increase the dividend at a compound rate of 20% annually in its first three years after the IPO.
TerraForm Global’s IPO is definitely one that investors will want to watch. The IPO is a very large one, expecting to raise over $1 billion, and the company could be an intriguing investment opportunity in the future, as it has a great deal of potential for success and will pay investors quarterly dividends.
The company’s IPO could be a great success if it’s able to mirror the success seen by fellow SunEdison spinoff TerraForm Power, whose stock soared 30% on its first day of trading, and whose shares still currently trade above the initially-offered price.
Be sure to check back with Zacks for a review on how TerraForm Global’s IPO performs on its first day of trade after being entered on the NASDAQ tomorrow.
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